Meal deals help to drive category growth but convenience retailers reliant on sandwiches are missing out
Bracknell, UK – 27 July 2017 – Food to go is one of the fastest growing convenience categories sold by convenience retailers, according to IRI, a provider of big data and predictive analytics to FMCG retailers and manufacturers. Sandwiches, sushi, salads and snacks purchased ‘to go’ grew 6.6% in the high street multiple (which include Co-op Food, Tesco Express, Little Waitrose and Sainsbury’s Local) for the year ended 25 March 2017, boosting revenues by £36mn for these stores.
Using IRI’s Convenience Market Place solution – which covers all UK supermarkets and convenience retailers including petrol forecourts – IRI claims that retailers have capitalized on the British shopper’s culture for convenience, expanding their ranges to include more innovative offerings than the lunch time sandwich.
Food to go sales in all retailers - including, high street multiples, convenience multiples, petrol forecourts, travel outlets and independent convenience retailers – is worth £2.3bn and grew by 5% in the last year. Main store supermarkets dominate sales in food to go with sales of £1.45bn while convenience retailers traded around £900mn in the last year. As the market has grown and retailers have seen how food on the go has the potential to bring shoppers into their stores, retailers have been experimenting with promotions including ‘meal deals’.
The sector now sells more than 1.4bn meals meaning that on average every person buys an average of 20 ‘food to go’ meals a year.
Across all retailers, sales of sandwiches grew by 3.8% to £1.4bn and while they still account for most volume sales, it is baguettes, salads and sushi - all higher priced items – which are showing faster growth. Ready to eat salads for example grew 5.1% to £800mn while sales of sushi grew by 12% to £100mn.
“’Ready prepared food is a way of life for most time-poor shoppers today who adopt a ‘buy-it-when-I-need-it’ approach to grocery shopping and who are eating out more,” said Martin Wood, Head of Strategic Retail Insight at IRI. “Now that there are more choices available, including sushi and salad, shoppers don’t need to compromise their health.”
“There are also some really good ‘meal deals’ being offered that add a drink – with more convenience retailers also providing fresh coffee - and/or a snack to the sushi or sandwich lunch at a price that often works out a lot cheaper than all of the component parts,” added Wood. “This is encouraging people to buy their breakfast, lunch or ‘anytime meal’ on the way to work or home, boosting sales across not just the food to go category but also snacks and beverages too.”
According to IRI, sales of beverages and snacks across all convenience retailers are also growing. Single-serve soft drinks* rose by 3.3% in sales value to just over £3bn while single-serve salted snacks* rose +0.4% to £0.7 bn. Collectively food to go, drinks and snacks are worth £7bn annually for all retailers.
However, independent convenience retailers (including symbol groups like Budgens, Londis, Spar, Costcutter and Nisa) who are more dependent on selling sandwiches, showed no growth in the food to go category unlike the multiple convenience retailers (Tesco Express, Co-op, Sainsbury’s Local, OneStop, McColls and Little Waitrose). All convenience retailers grew value sales of food to go by 5% in the last year (value sales of £865mn) but this was driven by the high street multiple convenience retailers with growth of 6.6% (to £584mn) and petrol forecourts and travel outlets up 2.9% (to £185mn). Independent convenience retailers showed a slight decline in food to go sales of -0.4% (to £96mn).
“There is a huge opportunity for independent convenience retailers to work with their wholesale and buying group partners to identify a broader range of ‘food to go’ options. In this way they can capitalize on these changing consumer behaviours,” concluded Wood.
IRI Convenience Market Place measures sales of every FMCG product sold in the UK’s main supermarkets (Tesco, Sainsbury’s, M&S, Coop, Asda, Watirose, Ocado, Morrisons and Iceland); high street convenience retailers (Tesco, Coop, Little Waitrose, Sainsbury’s Local, One Stop, McColl’s, GT, Boots, Superdrug, Wilko and WHSmith) independent convenience retailers (including Budgen, Nisa, Spar, Costcutter, Londis, Bargain Booze and petrol forecourts (BP, Shell, MFG, WelcomeBreak, Murco, Moto, Roadchef, MRH). The analysis is based on sales data for the 52 weeks to 26 March 2017.
*Individual single-serve bottles/cans/packs; does not include multipacks or large, sharing bottles/packs.
IRI is a leading provider of big data, predictive analytics and forward-looking insights that help FMCG, OTC health care, retailers and media companies to grow. With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand cloud-based technology platform, IRI guides over 5,000 clients globally in their quests to remain relentlessly relevant, capture market share, connect with consumers and deliver growth. www.IRIworldwide.com. Follow IRI on Twitter.
For further information please contact:
Teresa Horscroft, Consultant
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